Pirelli's Olivetti Financing
Leaves Much to Be Desired

Edited by Hugo Dixon

Updated Sept. 20, 2001 12:01 a.m. ET

Pirelli is still sitting on a financial powder keg as a result of its purchase of a controlling stake in Olivetti. The Italian tire and cable group has failed to secure a cut in the headline 6.6 billion euro ($6.12 billion) price it paid Bell, which previously controlled Olivetti and, via it, Telecom Italia. But Pirelli has managed to secure two billion euros of extremely cheap financing.

The biggest benefit comes from Bell's promise to subscribe to a one billion euro bond issued by Olimpia, the shell company used by...